What is Network Marketing, Really?

What is Network Marketing?

Network marketing is a misunderstood and irrationally feared business model. 

It’s like the dread pirate Roberts in the movie The Princess Bride. Just the mention of it conjures a feeling of irrational dismay. The unreasonable phobia attached to it is an unfortunate cultural phenomenon. 

What is network marketing? 

Network marketing, also called referral marketing, is a business model that involves a network of independent agents who directly sell to the end user. In addition to direct sales, these agents can also cultivate a “down-line” of other agents they recruit, and earn commissions off of their down-line’s sales. 

This blog is the first in a series of seven. We will present the positive and negative attributes of the network marketing business model. The intention is to provide solid, factual useful information about this dynamic industry. Here’s a list of blogs to come:

Top Network Marketing Programs

Tips to Succeed with a Network Marketing Company

Strategies to Succeed with Network Marketing

Network Marketing Courses and Trainings

Skin Care Network Marketing Companies

Supplement/Vitamin Network Marketing Companies

Network Marketing Defined

Network marketing (often referred to as “referral marketing”) is a subset of affiliate marketing. Consequently every referral marketing company is an affiliate marketing company, but not all affiliate companies are network marketing programs. What’s the difference?

Affiliate marketing is performance-based shopping where a company rewards affiliates (you) for each visitor or customer you send the company. The company offers products and services, and when you help them sell that product or service, you earn a commission. Affiliate marketers are independent business owners. Your business is to function as a brand representative for products produced by other companies. 

There are three parties to a transaction. 

Company – They function as designer, creator, manufacturer, supplier, provider.

Advocate – This is the advertiser, blogger, publisher, middleman, promoter.

Customer – The end user, buyer, client, consumer, shopper, user.

Affiliate marketers function as the Advocate. There are different types of affiliate marketing. Only one category of affiliate marketing uses the referral marketing business model. Let’s break it down into three overall classifications.

1 - Detached

2 - Linked

3 -Participating (hint – this is the one)

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